Just an Opinion… Have Our Partners Succeeded in Managing Our Companies?

It is said that John Adams, the second President of the United States (1797–1801) and successor to George Washington, once stated:
“Interests and needs determine allies and partners, not the other way around.”
A statement made over two centuries ago, yet it established a golden rule for choosing partners: your needs and interests should define the type of partner you seek—their nationality, technical capabilities, and financial strength.

The Egyptian petroleum sector has seen many partners over the years. In the early stages, major American companies such as Amoco and Conoco played a pivotal role during the era of major discoveries in the Gulf of Suez. Apache, too, made significant strides in the Western Desert. These companies operated by the very logic Adams spoke of—prioritizing their own interests over partnership—and withdrew with surgical precision. Apache, to its credit, continues to resist this trend and remains in the country to this day.

With the decline of the American model, the British school took over, led by BP. However, BP’s success in crude oil exploration was limited, achieved only through partnerships with other major European firms like Shell and Dea Wintershall (notably in SUCO fields). Even when BP inherited the legacy of GUPCO, it lingered for a while but eventually exited the crude oil domain following a string of exploration failures, the most notable being in the Wadi El Natrun region. BP then shifted its focus toward natural gas exploration in the Mediterranean.

Russian and Ukrainian companies have also entered the scene, but their production remains insignificant in terms of national contribution.

As for the French school, it focused on operations in the Nile Delta, based on technical studies suggesting the delta was rich in oil and gas. This school had a noteworthy technical impact, enriching the geological database and contributing to discoveries like Abu Madi and El Qaraa, in addition to some oil fields in the Gulf of Suez such as East Ras El Dib and Ras Ghareb (now operated by El Amal Petroleum). Yet, they too eventually exited Egypt.

Then came the “Yellow Dragon”—Chinese companies—which began making significant investments in areas like Alam El Shawish, PetroAmir, and other fields in the Western and Eastern deserts. However, they have yet to find a solid strategic foothold in Egypt—an issue worthy of a separate discussion.

On the other hand, some Egyptian companies sought to acquire the assets left behind by foreign partners, seeing them as investment opportunities at reduced cost. Yet, the overarching trend remained: most of these ventures merely capitalized on what already existed. A notable exception is Eng. Ehab Awad, who built a fully Egyptian entity starting from exploration in the offshore East Magawish area in the late 1990s and has continued successfully to this day.

Thus, it becomes evident that foreign partners—be they American, European, or Chinese—have always approached us with a clear formula: their vision, their interests, their capabilities. Meanwhile, we approached them with a shallow mentality of “whoever pays more becomes a partner,” with little regard for vital factors such as technical competence, financial solvency, or strategic alignment.

We failed to realize that those who pay more always take more—because investment is neither sentimental nor academic; it is governed by strict rules and harsh realities.

Unfortunately, the structure of joint ventures in Egypt was born out of this superficial outlook, ever since Eng. Aziz Sedky, then Minister of Petroleum in Mahmoud Fawzi’s government, convinced President Sadat that the foreign partners would bear all the project costs. What he omitted, however, was the detail of cost recovery and profit sharing—a mechanism that continues to weigh heavily on any project’s viability.

And so history went on… Our joint ventures have become hostage to partner policies, subject to their strategies, while we remain largely in the dark. Often, we end up with companies that demand investments far beyond what their reserves are actually worth.

In the next article, we will continue exploring this critical topic and examine the strategic approaches currently adopted by the petroleum sector.
Are they the right path for managing our existing partnerships?
Stay tuned for tomorrow’s analysis.
Regards,
#Socrates